Bankruptcies compound stress for embattled US CLO market

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By Paola Aurisicchio
21 May 2020

A gathering storm of bankruptcies among US retailers rolling in behind a swelling wave of loan defaults is bringing distress to the US CLO market, forcing both managers and investors to adjust their approach, writes Paola Aurisicchio.

The economic effects of the coronavirus pandemic have put intense pressure on CLOs. Aggressive negative rating actions from the major rating agencies have led 60% of US CLOs to exceed the 7.5% limit on their triple-C buckets and 15% of all deals to breach tests that safeguard investors ...

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